Child Day Care and Insurance

Starting and operating a business involves a degree of risk. It is important to have adequate insurance protection for your business. If you aren't exactly sure what type of insurance is best, discuss coverage and rates with several insurance agents before making a final decision.

Insurance coverage varies from state to state, but there are several types of insurance available for child care providers. Liability and accident insurance are considered essential.

Liability

A provider is liable and can be sued in court for any accident occurring because of alleged negligence or failure to exercise reasonable care. You, your employee(s), your home or your property can be found negligent.

Liability insurance for a child care program generally covers most injuries that may occur. Under such a policy, the insurance company will defend you if you are sued. If the court decides that you are liable (meaning your negligence caused the child's injury and, therefore, you should pay compensation), the company will pay the cost of the judgment up to the limits of the policy. Several states require that providers carry liability insurance, at least in some situations, and many others strongly advise it. To find out about your state's regulations, contact the local office that licenses or registers family day care or call a providers' organization.

Most general liability policies cover four basic types of costs:

• Bodily or personal injury
• Damage to others' property
• Immediate medical relief at the time of an accident
• The legal costs to defend you in a lawsuit

Other areas for possible coverage are:

• Transporting children
• Accidents in which no one is at fault
• Defense costs in the event of physical/sexual abuse
• Damage to your property

Liability coverage is offered on one of two bases: (1) claims made and (2) occurrence. With claimsmade policies, you are covered only for incidents that are reported during the time your policy is in force. Occurrence insurance covers you for incidents that occur during the time your policy is in force.

Liability insurance is expensive, but there are several precautions you can take to reduce the chance of accidents occurring.

• Child proof every room where the children will be; imagine any possible accident and prevent it
• Take first aid and CPR (cardiopulmonary resuscitation) courses (call your local Red Cross for information)
• Learn to keep an eye on all the children
• Keep walkways, stairs and sidewalks clean
• Avoid fire hazards
• Choose responsible assistants and substitutes
• Develop clear health and safety policies
• Encourage parents to visit any time and give them your written policies

You will find that these and other policies will make your center safer. For additional information on the different types of liability insurance, contact your insurance agent

Accident

For a small cost, you can buy accident insurance to supplement your family's medical insurance if a
child or employee is injured. Talk to an agent or broker before deciding on the coverage.